Ways to reduce the tax bill on death

Capital acquisitions tax must be paid by a deadline of October 31st for gifts/inheritances valued in the previous 12 months.

It’s an area to which the Revenue Commissioners are paying close attention. The Revenue says between 2013-2014 it investigated about 750 cases involving capital acquisitions tax, and these resulted in an additional yield of more than €20 million, or an average of €26,666 per case.

1 DISPOSE OF THE MONEY – get money to individuals without affecting their thresholds by using the €3,000 annual small-gift exemption. This can be a convenient way of handing over money without incurring a tax bill.

2 CREATE A TRUST – put funds up to the child threshold of €225,000 into a trust fund, the fund might be worth three times the original threshold – but the child won’t incur a tax bill on it.

3 FAMILY HOME RELIEF – Under this relief, if a child lives in the family home for three years leading up to the gift or inheritance (and has no other property themselves), the parent can then gift it to them tax free, as long as the child then stays in the property for six years after the handover and doesn’t own other property in that time.

4 GET AN INSURANCE POLICY – you can buy an insurance policy which will cover this sum in the event of your death.

5 DECIDE WHO IS TO GET THE ASSET – there may be more tax advantages in passing on certain assets to someone who is bound by the thresholds than to a spouse for example.

Notice :
In contentious matters, except debt collection matters, a solicitor may not calculate charges as a specified percentage or proportion of any damages or other monies that may become payable to the client and any such charges are unenforceable in any action to recover them. This website is for information purposes only. Please contact the office for legal advice.

Notice : In contentious matters, except debt collection matters, a solicitor may not calculate charges as a specified percentage or proportion of any damages or other monies that may become payable to the client and any such charges are unenforceable in any action to recover them. This website is for information purposes only. Please contact the office for legal advice